Public utilities sue to disqualify Prop. 16

A broad coalition of California's public utilities, including the San Joaquin Valley Power Authority, have sued to disqualify Proposition 16 from the June 8 ballot "for being false and misleading and for concealing its true nature and purpose from voters."

The lawsuit, filed last week in Sacramento County Superior Court, contends the initiative is a secret attempt by Pacific Gas & Electric Co. "to lock in its monopoly in its existing territories."

PG&E has vowed to spend as much as $35 million to pass the measure, which would require publicly owned utility expansion plans to win a two-thirds vote of residents in the public utility's existing boundaries and in new areas to be served.

Presently a simple majority is required.

"This double-locked protection effectively guarantees that PG&E will never again have to defend its rates and service from competition by a public provider whose rates and service are a better choice for customers," the suit states.

Officials with the San Joaquin Valley Power Authority say battles with PG&E are not new. PG&E attended meetings in 2007 to criticize the authority's plans and said it would be unable to provide electricity as reasonably as PG&E despite a promise to keep rates at least 2% below PG&E's generation rate.

Two of the authority's largest potential customers, the city of Fresno and Tulare County, opted out of the Valley power cooperative.

The authority filed suit against PG&E contending that the utility did not separate its marketing funds from money that came from ratepayers in its campaign opposing the authority.

A settlement was reached that paid the authority up to $450,000 for legal costs. The utility also pledged to apprise the authority of its concerns before appealing to local agencies.

That settlement came about because PG&E was not playing by the rules set by the state Legislature and California Public Utilities Commission, said Ron Manfredi, Kerman city manager and San Joaquin Valley Power Authority chairman.

At one point, the authority had plans for more than 300,000 customers. When its plans were put on hold last year, it had been whittled down -- mostly through PG&E-related defections -- to fewer than 115,000 customers.

State law allows for new utility models to be developed, he said, but those new proposals are "being thwarted by the misleading [Proposition 16] campaign."

He said PG&E is pumping millions of dollars into the measure, saying that taxpayers will be hurt if new public agencies provide electricity, which is false.

"The PG&E model is not the only model that will work," Manfredi said.

Proposition 16 spokeswoman Robin Swanson said it is ironic that public utilities accuse the company of backdoor tactics when it is PG&E that is airing the issue so voters can make an informed decision.

"These entities and the politicians would rather go to the courts than go to the people," Swanson said. "Besides," she added, "their claims are baseless, and they have missed all the constitutional deadlines to get it off the ballot.

"This is a Keystone Kop approach to get the media to talk about their own ballot arguments," she said.

It takes a two-thirds vote to leave when municipal utilities fail, she said, so why shouldn't it take the same majority to approve one.

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